Europe stocks lose ground after G-20

Stocks pare losses after U.S. home sales data; auto makers decline

LONDON (MarketWatch) — European stock markets lost ground Monday, led lower by banks after G-20 finance ministers pressured euro-zone leaders to boost the region’s bailout fund, although losses were pared after stronger-than-expected U.S. home sales data.

The Stoxx Europe 600 (SXXP) closed 0.3% lower at 263.86 after trading as low as 261.62 earlier in the session.

Stock markets pared losses in afternoon trade as pending U.S. home sales rose 2% in January to the highest level since April 2010. U.S. stocks traded higher, reversing earlier losses . Read more about home sales

Posting the biggest drop in the European index, Essar Energy PLC (ESSR) sank 14.6% after reporting it swung to a $881.1 million pre-tax loss in 2011.

Where next for mobile?

(2:11)

Mobile is disruptive, with the humble phone now competing with PCs and tablets as the primary consumer and business tool. Where it is headed next will be on show at the Mobile World Congress and WSJ's Ben Rooney discusses what to expect. Photo: Reuters

The U.K. FTSE 100 index (UKX) declined 0.3% to 5,915.55, also weighed by Lloyds Banking Group PLC (LLOY)
LYG, -2.77%
off 2.3%, and Royal Bank of Scotland Group PLC
RBS, +0.09%
(RBS) down 2.1%. The Financial Times reported Sunday that those banks will likely tap a combined €15 billion ($20.2 billion) in the European Central Bank’s long-term refinancing operation on Wednesday.

Shares of heavyweight HSBC
HBC, +0.08%
(HSBA) fell 3.7% after reporting 2011 pretax profit rose 15% to $21.9 billion, which was just below a forecast of $22.2 billion from analysts polled by Reuters. That profit also included a $3.9 billion gain from the value of its own debt.

Among the few stocks in the black, heavyweight BP PLC (BP.)
BP, -1.88%
added 1.1%. Bloomberg News said the oil group is negotiating a $14 billion settlement of claims related to the 2010 Gulf of Mexico oil spill. BP said in a statement on Sunday that a trial set to begin Monday has been delayed by the U.S. District Court in New Orleans to give both sides time to reach a deal.

The broader European stock market, along with all country-specific indexes, headed lower after the G-20 over the weekend said it will support adding more funds to the International Monetary Fund if the euro zone also contributes more money.

“Europe must demonstrate its own efforts for the entire world to see,” said Japan’s finance minister Jun Azumi, while Britain’s finance minister, George Osborne, said that “until we see the color of their money, I don’t think you are going to see any money from the rest of the world,” according to media reports.

“Without an event, a resolution, it is difficult to make any kind of decisions - there is no framework to hang an investment view around. More kicking the can down the road makes investing and trading tough. But there is still massive opportunity for an unexpected upset,” said Louise Cooper, markets analyst at BGC Partners, in a note.

Germany’s parliament, as expected overwhelmingly backed the second bailout plan for Greece agreed to by euro-zone finance ministers last week.

Italy debt auction, banks under pressure

Italy was also in focus. The government sold 8.75 billion euros of six-month bills, as short-term borrowing costs declined. Still, the yield on Italy’s 10-year government bond (10YR_ITA) rose 2 basis points to 5.41%. Read more about the Italian auction

Peugeot SA (UG) was among the top decliners in Paris, off 3.5%, and Renault SA (RNO) traded 2.2% lower. The French CAC 40 index (PX1) was off 0.7% at 3,441.45, further pulled lower by Societe Generale SA(GLE) off 3%, and Credit Agricole SA (ACA) trading 3.5% lower.

The technology sector also offered up some declining stocks. Shares of mobile-maker Nokia Oyj
NOK, +0.28%
(NOK1V) dropped more than 6%. The company announced two new smartphones in the Lumia range at the Mobile World Congress in Barcelona. Read more about the Mobile World Congress

In an interview with Dow Jones Newswires, Niklas Savander, Nokia’s head of sales, said the company aims to introduce Windows Phone devices at the $100 mark in order to compete with competition from Chinese manufacturers.

Stoxx 600 heavyweight Statoil ASA (STL) added 1.9% after the oil company confirmed it has made a high-impact discovery offshore Brazil.

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